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How the Physician Payment Sunshine Act Could Affect Practice Revenue

Greg Freeman, October 10, 2013

"What this means for most physicians is that they will seriously rethink any collaboration they might have with drug companies," Hitchcock says. "As a practicing physician, I really don't want my name on a list for having been to this CME and gotten this amount of money from Pfizer and this amount from Schering-Plough. I know that I personally will no longer be attending CME that is sponsored like that."

The looming disclosure is best known by those physicians who earn substantial income from their interactions with drug and device companies, but the requirements will affect nearly every practicing physician, says Hitchcock. General practitioners may be affected less, he theorizes, while specialists who are involved in more research could face choices about whether to continue.

Nearly all compensation covered
The definition of compensation requiring disclosure is broad, explains David Schweighoefer, JD, a partner with the law firm of Walter Haverfield in Cleveland. It includes cash, cash equivalent, in-kind items or services, stock, stock options, dividend interest, or any other kind of ownership interest or other kinds of payment. Included are consulting fees, honoraria, gifts, entertainment, education, research, royalties, license fees, speaking fees, and grants.

"The net appears to be thrown fairly widely to capture almost everything that would be a transfer of value," he says. "Nearly any way you can be compensated by a company is going to be included. That's not to say it's illegal.

Certain things are excluded, however. Educational materials for patients do not trigger the reporting requirement, and neither do rebates or discounts. Schweighoefer points out, however, that any transfer of monetary value to a physician's family member does count. Don't think you can get around the reporting requirement by having the company provide the compensation to your child, sister, or parent.

Most patients will not be concerned with whether you have a financial relationship with a healthcare company, Schweighoefer notes, but there will be some that challenge physicians about those relationships.

"In those few cases, you may want to be prepared to explain your relationship and why it does not affect your clinical decision-making," he says. "I have spoken with some physician clients who intend to explain that relationship, however innocuous, to the patient up front so that there is no misunderstanding later."

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